The tiny 70-year-old designer — legendary in the fashion world for ending her runway shows with cartwheels and a split — paced nervously in her small studio on West 37th Street in Manhattan, crammed with hot-pink vintage knickknacks and a rainbow of tulle skirts that hung from the ceiling.

She pulled out old pictures and fiddled endlessly with her abundant yellow hair extensions. She laid out plastic bags of salted almonds, dried cranberries and Twizzlers. She passed around plastic cups of Korbel sparkling wine.

“I hardly eat anything except those,” Ms. Johnson said, legs akimbo in her pink chintz chair. Skinny and flexible, in heavy eye makeup, tight vintage T-shirt (her own design) and ripped black jeans, she looked like a punky, rag-doll version of Dolly Parton, minus the ample breasts. As for the midday bubbly? “I’ve got to have a little to calm down,” she said. “I’m the it’s-always-5-o’clock-somewhere girl.”

Nevermind it was 2 p.m. Ms. Johnson’s loopiness is well known and beloved. But there is one realm where she has been ruthlessly focused. Last April, Betsey Johnson LLC filed for bankruptcy, which resulted in the closing of all 63 stores including the original flagship in SoHo and the firing of 350 employees. So at an age when her peers are retiring, Ms. Johnson has set about resurrecting — and reinventing — her fashion empire, dress by colorfully wacky dress.

Next month, with the retailer Steve Madden as her new parent company, she is introducing a lower-priced line of Betsey Johnson frocks at department stores. In the spring, she and her 37-year-old daughter, Lulu Johnson, will be starring in their own reality TV show. And, this summer, her third fragrance, Betseyfied, hits stores.

But even as her brand changes, her trademark look has not. For nearly 35 years, her new-wave colors, skintight party dresses and prom-queen-gone-rogue petticoats have barely wavered. Her new collection hews to the same codes.

“I stick to my guns, my sheaths and my sexpots,” she said. “And I’ve always kept the price of a dress at or below the price of a round-trip weekend in Puerto Rico. That’s been my formula.”

That formula has inspired younger designers who brought similarly outrageous looks to the runway, including Heatherette, Jeremy Scott and the Blonds. Her comeback is a test not only of her resilience but also, to a broader extent, of whether independent designers, birthed in the cradle of New York’s downtown creative scene, can still compete in the era of fast fashion.

“She’s built a huge brand based on youthfulness and rebellion,” said Sophia Amoruso, 28, who designs the vintage- and punk-inflected Nasty Gal line. “Her clothes were never too-cool-for-you. They just said that it’s fun to be a girl.”

THE road to bankruptcy was paved with candy colors. At her label’s height in the mid-2000s, Ms. Johnson had $150 million in annual sales, 400 employees and lucrative licensing deals in footwear, handbags, sunglasses and fragrances. In 2007, looking to take her brand bigger, Ms. Johnson sold a majority stake in her company to Castanea Partners, a private equity firm in Boston. A dozen stores soon opened in San Francisco; Chicago; Austin, Tex.; and elsewhere.

But the expansion collided with declining store sales, and the company found itself defaulting on a $48 million loan. In 2010, Steve Madden stepped in to take over the loan and, with it, ownership of the Betsey Johnson brand. So why the tumble? Ms. Johnson, not one to focus easily, had a hard time answering. “We were bogged down in five-year projections,” she said, haltingly. “Or maybe it all began when stores started knocking off my $250 prom dresses for $49.”

Whatever the case, profits plunged by half and last April, unable to find a buyer after approaching 22 investors, Betsey Johnson filed for bankruptcy, with more than $4 million in debt.

Industry observers blamed the poor timing: the expansion coincided with the 2008 financial crisis. “They went into a licensing frenzy,” said Fern Mallis, a fashion consultant. “There was not a category she didn’t have her name on, and there was maybe not the infrastructure to manage that carefully.”

Steve Madden, the shoe and fashion mogul who is now effectively Ms. Johnson’s boss, put it more bluntly. “They had delusions of building a huge company and going public,” he said. “So they borrowed a lot of money, they had too many stores, and their rents were too high.”

Analysts also saw a consumer shift. “When you’re selling avant-garde expensive products in an economically challenged environment, things get difficult,” said Marshal Cohen, a chief analyst for the NPD Group in Port Washington, N.Y., which tracks the fashion industry. “The younger women that buy her don’t even have jobs anymore, let alone income.”

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Her signature runway cartwheel.Credit
Benjamin Norman for The New York Times

With that in mind, the ever-upbeat Ms. Johnson — she marked the bankruptcy, after all, by toasting her staff members with sparkling wine and cupcakes — decided to go lower-priced. If the old benchmark was a weekend trip to Puerto Rico, Ms. Johnson’s new formula is to offer playful party dresses for the price of a day trip to the Mohegan Sun.

Simply called Betsey Johnson, the new line of girlie dresses will be sold at select Macy’s and other retailers, including Nordstrom, starting in February for $99 to $249. “They’ll be young in spirit like Betsey is, but accessible for women up to 40 years old,” said Lisa Andriulli, a vice president of Macy’s.

Ms. Andriulli added that the dresses have classic Johnson touches like fun prints and petticoats, but are sized more generously.

And to stay in the spotlight, Ms. Johnson and her daughter, Lulu, are filming a reality TV show that follows Lulu’s efforts to start her own fashion line called Lulu Johnson. Set to have its premiere on the Style Network in March, it is called “The Betsey and Lulu Show.”

Filming has been nonstop since August, with crews practically camped out in Ms. Johnson’s studio. “The producers keep telling me to stop playing to the camera,” she said, as aides darted about. “But I think they might let me get away with it.”

Just as she’s always gotten away with her boy-craziness. She confessed to having a hopeless crush on one cameraman, a scruffy 30-year-old named Ben. Though married three times, Ms. Johnson is currently single and lives on the Upper East Side with Lulu and her granddaughters, Lela, 6, and Ella, 4.

“Ben’s the cutest and sweetest man I’ve ever met!” Ms. Johnson said.

It’s that kind of ditsy flirtiness, with a touch of St. Marks Place sex-bomb, that has fueled Ms. Johnson’s brand all these decades. Born in 1942 into what she calls a “very WASPy Protestant family” in Wethersfield, Conn., the daughter of a mechanical engineer and a guidance counselor, Ms. Johnson made her first garment when she was 4.

“It was an apron with a doggy print on it,” she said. Her childhood love of dance informed her view of fashion as performance. “Makeup; glitter; Sleeping Beauty; Pinocchio; butterscotch candy; oh, and Mitzi Gaynor, ‘Honey Bun’; ... oh, oh, and um, peanut butter!” is how Ms. Johnson remembers those early years.

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Betsey Johnson.Credit
Elizabeth Lippman for The New York Times

After graduating from Syracuse University, Ms. Johnson found her way to New York in the Swinging Sixties, where she designed things like silver miniskirts for Paraphernalia, the mod boutique on Madison Avenue. At night, she ran with the Warhol crowd at the club Max’s Kansas City. She briefly married John Cale, a Velvet Underground member, in 1968, and enlisted Edie Sedgwick, the model and Warhol muse, as her fit model.

“We were a bunch of poor, frantic, lonely creative kids,” Ms. Johnson recalled. “Everyone was taking speed. Not me — I only took diet pills.” Ms. Johnson looked perplexed when everyone in the studio laughed, before laughing along with an oh-what-the-heck shrug.

In the ’70s, Ms. Johnson did freelance designing for Butterick patterns and Alley Cat. But it was not until 1978, when the punk scene at CBGB’s raged, that Ms. Johnson and her friend Chantal Bacon, a former model, cobbled together $100,000 to form the Betsey Johnson label. The following year, they opened the first store at 130 Thompson Street in SoHo.

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“We wanted to make clothes for us and our friends — the kind of stuff we were wearing at Mudd Club,” said Ms. Bacon, who stayed with the company until 2010. “We were doing a lot of pink and black striped Lycra when everyone was doing the earth-toned Annie Hall thing.”

Kim Hastreiter, the co-editor of Paper magazine, remembers Ms. Johnson then as a kooky original. “Back then, you were either uptown or downtown, and Betsey and I both were definitely downtown,” she recalled. “She put rock chicks on roller skates for her fashion shows and was constantly eating popcorn and licorice. She always had a boyfriend and then sometimes she’d get married.”

Sales grew steadily through the decades and Ms. Johnson’s runway shows, which riffed on playful themes like “The Little Rascals” and ’50s beauty parlors, were whimsical parties amid the seriousness of Fashion Week.

“She’s always been either the youngest old fashion designer in the world, or the oldest young one,” Ms. Mallis said. In 1999, the Council of Fashion Designers of America, then helmed by Ms. Mallis, gave Ms. Johnson its Timeless Talent award.

It was the same year that Ms. Johnson underwent a lumpectomy for breast cancer, enduring radiation while preparing for a show. She didn’t let it spoil the fun. “I only found out about the cancer because one of my breast implants deflated,” Ms. Johnson said, cracking herself up.

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Shoes from the new Betsey Johnson line.Credit
Elizabeth Lippman for The New York Times

It was typical of how she turns bad news into fun-filled romps. During Fashion’s Night Out in September, five months after declaring bankruptcy, she gave a street party outside her shuttered SoHo flagship, holding court in a sparkly tiara.

That same week, she managed to show her latest collection. Part career retrospective and part 70th birthday party, the show featured her pal Cyndi Lauper performing.

And it ended, of course, with a cartwheel and a split. “I’ll be so depressed when I can’t do them anymore,” Ms. Johnson said. “At that point, you may as well just put me in a wheelchair.”

Mr. Madden said he was confident that the new line, which will also sell on betseyjohnson.com, will put her name back into the black. “There’s a girl in every town that identifies with Betsey,” he said. “It just means more Betsey for all of us.”

And Ms. Johnson is determined to give more Betsey. On a rainy, cold night on Long Island last month, she was at a ’50s-style diner she had rented to shoot new images for her Web site, vamping with two 20-something models wearing her new crinolined dresses. The reality TV crew was also on hand to capture every zany moment.

While the models, their hair shellacked into Eisenhower-era cotton candy, pouted away, Ms. Johnson strode onto the set — a balloon-strewed dance floor — wearing a vintage studded-leather jacket, a velour Alaïa minidress (also vintage), fishnet stockings and black bootees with seven-inch spike heels. While everyone waited, she couldn’t help but clown around with the TV crew — there was no Ben, that night, alas — who were snapping photos with their iPhones.

“Betts, can we focus so we can get out of here?” a weary producer who looked half Ms. Johnson’s age asked in a monotone. The stylist on the shoot appeared visibly dismayed when Ms. Johnson undid the bangs of a model’s carefully coifed hair to create a bad-girl runaway tendril.

“Let’s make it a little more rock ’n’ roll,” Ms. Johnson said, before spontaneously breaking out into the twist in front of a jukebox. “Who’s gonna rock around the clock tonight?”